Big changes on the horizon

For the game industry, 2021 felt like in many ways like a year of stasis. Countless games were delayed due to pandemic work disruptions, the next-gen consoles from Microsoft and Sony were still near-impossible to find, and many of gaming’s biggest events, from E3 and Gamescom to major esports circuits, stayed all-virtual.

But 2022 promises some big changes, including a potential return of in-person events and a fully loaded slate of new releases. The bigger-picture view of the industry is that gaming is on the precipice of major shake-ups to its core business and distribution models, as well as shifts many years in the making around game monetization and developer work culture.

The gamer developer labor movement will continue to grow. Arguably the biggest story in the game industry last year was the lawsuit against Activision Blizzard and the broader industry-wide reckoning around gender discrimination and sexist work cultures in gaming. In 2022, the push to improve working conditions for the people who make video games will only become a larger fixture of the industry conversation.

• California’s lawsuit against Activision Blizzard remains active, despite the company settling with a separate federal agency for a paltry $18 million. CEO Bobby Kotick is still in charge, but pressure is mounting for his resignation as employees at subsidiary Raven Software and other divisions remain on strike and talk of unionization grows louder.
• Beyond Activision, employees at Ubisoft and other major studios are now talking more openly about labor organizing and improving working conditions. Last month, the first ever North American game developer union was formed at indie studio Vodeo Games. More than half of developers polled for the Game Developers Conference’s annual state of the industry report now say they support unionization.
• Riot Games settled a class-action gender discrimination suit from 2019 for $100 million last week, setting the bar for what similar settlements might look like for other major developers under fire for sexist and discriminatory workplace cultures.

Subscription gaming will get competitive. Since 2017, Microsoft has been an outlier in the industry with its Xbox Game Pass subscription. That won't be the case in 2022. Nintendo has already started beefing up its Switch Online subscription with extra add-ons and other perks, and subscription gaming is already proving a useful delivery mechanism for new services like cloud gaming.

• Sony is reportedly tired of waiting on the sidelines and plans to launch its own Game Pass competitor in the coming months, including a tier that could bundle its PlayStation Now cloud service with a catalog of retro games. Down the line, Sony may include new releases, like Microsoft does.
• Many gaming companies are now turning to subscriptions to lock customers into recurring billing contracts. Apple has its Arcade subscription for premium mobile gaming, and Amazon and Nvidia both offer monthly subscriptions for cloud gaming products. EA and Ubisoft both offer their own take on XBox Game Pass, too, though both services remain limited for now.
• Subscription gaming may have complex, unforeseen impacts on how games are funded, made and sold, and it remains to be seen how wider-scale adoption of the business model will influence both indie titles and big-budget blockbusters.

It’ll be cloud gaming’s make-or-break year. Cloud gaming has been steadily trying to prove itself for years, and in 2021 it stumbled as Google Stadia shut down its in-house game development efforts and many of the promises of streaming games over the internet remained unfulfilled. Looking forward, the industry will have to find ways to make cloud gaming more enticing, or simply walk away from it until the technology improves.

• Cloud gaming remains dependent on strong infrastructure and good internet connections, and even the most capable of tech titans like Amazon, Google and Microsoft can’t deliver experiences without noticeable lag, stuttering and other issues. That’s a deal-breaker for most competitive online games.
• Many of the business models of cloud services aren’t attractive enough right now, forcing people to buy games they can only stream or pay a premium to stream titles they already own.
• Microsoft’s cloud service remains one of the only ones with clear benefits, allowing you to play Xbox Game Pass titles on virtually any device as part of a standard subscription. Another one to watch is Nvidia’s GeForce Now, which has been steadily signing up publishers and developers every week and building an impressive library.

AR and VR will continue to rise. These past few months have been consumed by talk of the metaverse, the supposed next generation of the internet that Facebook, now Meta, is banking the future of its business on. But there’s been very little talk on where the foundational technologies of the metaverse — augmented and virtual reality — might be going in the near term.

• In 2022, we should expect to see a lot more discussion on where AR and VR are headed and what kinds of experiences they might deliver in the interim, before the metaverse fully materializes. Right now, both technologies are mostly still used exclusively for games, but we may see them being used more and more in social and workplace contexts.
• For Meta, VR headsets are among its fastest-growing businesses, and it’s setting the stage for a major rivalry between the social networking giant and Apple, which is supposedly developing a variety of headsets and smart glasses. Microsoft is a contender as well, thanks to the HoloLens and its Altspace and Mesh mixed reality platforms. 2022 might be when we start to see some actual products revealed or even launched.
• Niantic struck gold with 2016’s Pokémon Go, but it hasn’t been able to replicate the success of that game with other AR entries. The company is now banking on its set of developer tools, called Lightship, to try and help other developers navigate the future of AR and potentially hit another home run.

The crypto movement is here to stay. 2021 was the year crypto and gaming collided, giving rise to big hits like Axie Infinity and a fresh wave of hype around the promise of blockchain gaming and NFTs.

• There was also plenty of backlash, with players showing extreme distaste in a future dominated by play-to-earn games, cryptocurrency tokens and all manner of other get-rich-quick schemes borrowed from the decentralization movement.
• In 2022, expect to see many more startups arriving on the blockchain gaming scene. VCs are funneling money into the space, including millions from the Web3 evangelists at Andreessen Horowitz, and the financial incentives baked into NFTs and play-to-earn are already proving popular among younger generations and those in developing markets.

— Nick Statt

The exec exodus at Amazon Luna

Gabi Knight, a 17-year veteran of Amazon and most recently the company’s general manager and director of product management at its Luna cloud gaming service, has left for Unity. There, she’ll be the vice president of Business Operations, Strategy and Analytics at Unity Create.

Knight’s departure is notable because Marc Whitten, a founding member of the Xbox team, left his role as Amazon’s entertainment devices and services chief nearly a year ago to head up Unity Create.

A MESSAGE FROM LEXMARK

Lexmark, a leading provider of printers and imaging equipment — one of the first IoT devices — understands the potential as well as the challenges better than most. We sat down with Lexmark CEO Allen Waugerman to discuss this major development, which he calls one of the most significant milestones in the company’s 30-year history.

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In other news

A major win for women at Riot. League of Legends developer Riot Games last week settled its long-running gender discrimination lawuist for $100 million, with $80 million going to members of the class-action suit, The Washington Post reported.

Square Enix’s president is bullish on NFTs. Yosuke Matsuda published a letter on the future of gaming technologies, spending a fair amount of time discussing the promise of the blockchain. Matsuda added that Square Enix plans to "ramp up our efforts to develop a business accordingly, with an eye to potentially issuing our own tokens in the future."

Samsung’s newest TVs are all-in on cloud gaming. Samsung’s newest line of televisions, debuted at CES 2022, include native support for cloud gaming platforms Google Stadia and Nvidia GeForce Now.

Alienware takes a crack at game streaming. The Dell-owned brand of high-powered gaming PCs returned to CES 2022 this week with Concept Nyx, an experimental streaming platform for beaming games from one device to any screen in your home.

Roku teams up with Sharp. The two companies will debut Sharp Roku TVs in the U.S. later this year.

FitXR pauses PSVR and Steam development. The fitness app formerly known as BoxVR wants to wait for Sony to release the next version of PSVR before committing more resources to the platform, and its sole focus on Quest also means Steam plans are being put on ice.

The meltdown within the Call of Duty esports scene

The Call of Duty League (CDL) is a bit of a mess at the moment. One of the most outspoken and visible figures in the industry, 100 Thieves founder Matthew “Nadeshot” Haag, blasted Activision for its poor management of the pro circuit and raised alarms for the series’ broader competitive community.

“I went to our board of directors pleading for us to get back into competitive Call of Duty. I said let’s spend the money, let’s give our community what they’re asking for, just trust me and I’ll make sure LA Thieves is a success,” Haag tweeted late last week. “Two years later, I guess I’m the fool.” Haag’s comments inspired many others to speak up over their frustrations with Call of Duty and the mounting pressure to retire from pro play or switch to other games.

Many pros and those involved in the business side of esports have expressed concern over the latest Call of Duty entry’s design, as well as restrictions and delays imposed by the CDL and a lack of support from Activision itself. Many leagues have looked at the CDL and Overwatch League for inspiration in pushing esports into the mainstream, but both have struggled to validate their franchise model.